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An SEC task force this week recommended that life settlements be defined as "securities," making them subject to federal securities law.

If such a step were taken, market intermediaries, including settlement brokers and providers, would be required to register with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority Inc. (FINRA).

The group has been studying the issues since last year, finding that although there are currently regulatory group s in place for life settlements, a wide variance remains in how states adopt rules.

The task force recommended that SEC staff members ensure that settlement brokers and providers follow legal standards of conduct, and keep an eye on the development of a life settlement securitization market.

In addition, they urged Congress and state legislators to consider applying stricter regulation to life expectancy underwriters.

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